Please note: This is an open, non-sponsored, informal networking event. There will be no presentations and you will be responsible for your own entertainment, drinks. Attending the networking event is free but we will need you to register.

You will find the participants list of our recent networking event in Amsterdam here.

8 September 2015

Turkish Ambassador to Cameroon Omer Faruk Dogan is upbeat about the future of the relations and partnership between Turkey and Cameroon in the urban development and housing domain.

He made the remarks last September 2, 2015 while paying a farewell visit to the Minister of Housing and Urban Development, Jean Claude Mbwentchou after his three-year mission in Cameroon. The Turkish Diplomat came to pledge the Turkish government's wish to continue the bilateral relationship with the government of Cameroon in terms of mass housing development.

He reiterated that the Ministry of Housing and Urban Development is important for an emerging Cameroon through the construction of low-cost houses. While noting that Turkey has one of the most important constructors in the world in terms of capacity, the Turkish diplomat believed that they can greatly contribute to realising the huge projects in Cameroon.

Veteran investor Jerome Booth, who has long extolled the virtues of emerging markets, is to launch a new investment fund that will focus on renewable and conventional energy projects in Africa.

New Sparta Asset Management plans to invest in at least three power stations, each of which will need at least £50m of equity. The group, which has a number of economists on its board, including Sunday Telegraphcolumnist Liam Halligan, is about to launch a fundraising round for investors.

"There is a huge amount of untapped opportunity in emerging markets, particularly with companies in the private, pre-IPO stage,” said Dr Booth. “Our strategy is not only to bring the funds, but also find areas where we can add value by using our expertise to help companies, and nations, grow rapidly but sustainably.”

Only a small percentage of sub-Saharan Africa has access to energy, while South Africa, one of the major economies in Africa, regularly suffers from electricity blackouts.

Many foreign investors have recently taken an interest in the continent, following years of underinvestment into Africa’s power infrastructure. Last month, Dubai-based investment firm Abraaj Group raised $375m for a fund focusing on North Africa.

A South African initiative, Project Solaris, received the Roundtable on Sustainable Biomaterials (RSB) certification this week for producing a crop that can be used as feedstock for bio jet fuel.

The energy-rich tobacco crop has been named "Solaris" and it is grown in South Africa's Limpopo province. It is a nicotine-free and GMO-free plant that yields significant amounts of sustainable oil, which could be converted into bio jet fuel.

"Project Solaris has demonstrated that it can deliver sustainability on the ground in line with the RSBs global standard," said RSB's executive director, Rolf Hogan.

"This is the result of a serious commitment to working with local stakeholders, rural development and reducing greenhouse gases while safeguarding the Limpopo's unique natural environment."

Project Solaris got RSB involved from the start to make sure the correct standards were applied from the beginning. The programme was developed and patented by Sunchem Holding, a research and development company based in Italy.

Benefits

Project Solaris has brought economic and rural development to Limpopo.

"Developing a biofuel crop in South Africa's 'breadbasket' province has, of course, drawn us into the centre of the food vs fuel debate," said Joost van Lier, the managing director of Sunchem South Africa.

"Having to undergo a systematic process of evaluating the social and environmental ramifications of this development as prescribed by the RSB has allowed us to feel confident in promoting Solaris, not only as a financially viable crop for farmers in the region, but also one that will not affect food security or lead to environmental degradation."

Sergio Tommasini, the chief executive of Sunchem Holding, added: "Thanks to all partner efforts, we earned this important certificate. RSB believed in our technology and gave us the right advice to improve it during our scale up programme."

Management Consultant Carol Musyoka examines the Regulation on Angel Investment in Turkey. Could African governments support angel investors in the same way?

In June I attended the G-20 Global Partnership for Financial Inclusion, which held a workshop on Financing Entrepreneurship Innovative Solutions in Izmir, Turkey. Turkey currently holds the G20 Presidency and therefore its government played a pivotal role in the organization of the successful workshop. One of the panelists was a well-known Turkish entrepreneur, angel investor and author – Baybars Altuntaş – who impressed the audience with his vocalization of tax incentives that the Turkish Government provides to angel investors. I pulled Baybars to the side during a coffee break and asked for more details.

Once a person has registered as an angel investor in Turkey, they are allowed to net off up to 75% of their investments in start up companies against their income tax payable in the year. In other words, a tax holiday of up to 75% of your investment! Baybars added that angel investors tend to get together and pool their funds to reduce the risks as the success rate for their investments was only typically 10%.

“Why would one invest money in start ups if only 1 in 10 initiatives succeed?” I quizzed. Baybars smiled the smug smile of the wealthy and responded: “Because the returns from that 10% will make you more money than the losses on the 90%!” I walked away, scratching my head and realizing why my risk aversion would leave me a pauper for the rest of my life.

Angel investment support in Turkey

Angel investment is the provision of financial capital to newly established or growing companies which have novel business models or technologies with high potential for growth and profit but are unable to find eligible financing resources to realize their investments.

Recognizing the inherent benefits that angel investors would provide through entrepreneurial seed capital support as well as stimulating economic growth through job and value creation, the Turkish parliament passed the “Regulation on Angel Investment” law in June 2012 and the Treasury promulgated the enabling legislation in February 2013. The rationale behind the law is to promote the financing of small enterprises and entrepreneurs by providing tax incentives to angel investors.

According to a PwC Turkey Asset Management Bulletin, in order to benefit from the tax reliefs provided in the law business angels first have to obtain a license from the Treasury. The business angel cannot directly or indirectly be a controlling shareholder of the qualifying company that it wishes to invest in, neither can the qualifying company belong to his relatives. A qualifying company should, amongst other criteria, be a registered company in accordance to Turkish company law with a maximum of 50 employees and net assets of not more than TRY 10 million (Kshs 354 million).

If the business angels participate in qualifying companies whose projects are related to research, development and innovations then the applicable tax incentive is 100% instead of 75%. This is where it gets interesting. In order to get 100% tax relief those activities have to have been supported in the last five years by the Scientific and Technological Research Council of Turkey, Small and Medium Enterprises Development Organization and the Ministry of Science, Industry and Technology.

The tax reliefs are applicable until the 31st of December 2017 making it a 5-year program, but the Cabinet can authorize the extension of the date by another five years. Shares acquired by the angel investor have to be held for at least two years and the minimum investment is TRY 20,000 (approximately Kes 700,000) and a maximum of TRY 1,000,000 (Kes 35 million) annually.

Angel investment support in Kenya?

So let’s bring this concept home. Imagine if the Kenyan government picked four key economic areas that they wanted to drive with the help of the private sector. Let’s say agriculture, health, technology and education. Then the government wakes up to the fact that they can’t be all things to all people, and that they need to leave the business of business to the best people suited to do it: businesspeople.

They then assume that it’s far better to allow a business person to take a risk on an entrepreneur, as the business person has 1) a much better nose for sniffing out and recognizing good opportunities, 2) years of experience in making and losing money, therefore an appreciation for and recognition of risk, 3) business experience – the kind of which they don’t teach in business school – leading to mentorship, and 4) his/her very own money, which defines their skin in the game.